On 21 May 2011, recently elected Ivorian President, Alassane Outtara was sworn in at an inauguration ceremony held in Yamoussoukro, Cote d'Ivoire's administrative capital.

On 3 May 2011 many of the sanctions imposed in relation to Cote d'Ivoire were lifted. Most importantly, sanctions imposed by the European Union in relation to Petroci, the national oil company and Rialto's joint venture partner in CI-202, have been removed. While these sanctions were in place, Rialto was restricted from travelling to Cote d'Ivoire and the Company's ability to enter into contracts with Petroci and third party contractors was limited; thereby delaying the implementation of the CI-202 work program.

Rialto representatives have met in Abidjan, Cote d'Ivoire, with the Director General of Hydrocarbons and Petroci during the week commencing 23 May 2011 to discuss the work program for CI-202. The meetings have been extremely constructive and demonstrate that Cote d'Ivoire is looking to make itself once again 'open for business'.

Further, the Company notes announcements from other operators with interests in Cote d'Ivoire, that they are resuming operations in-country. It is expected that the multi-well drilling programs of operators such as Tullow, ENI, Anadarko, Lukoil and CNR will resume over the coming year.

Updated CPR and Field Development Plan Whilst delays in execution of Rialto's CI-202 work program have been the source of frustration for Rialto and its shareholders, during this period the Company has been able to further enhance its technical understanding of CI-202 and to evaluate various drilling and development scenarios in respect of block CI-202. This has resulted in manageable delays in respect of the implementation of the work program of approximately 3-4 months, with drilling now planned for 1st quarter 2012.

The mapping of drilling candidates in the Gazelle and Hippo areas is well advanced. In addition, ongoing subsurface work has allowed the identification of further substantial exploration upside. This generation of a robust portfolio of prospects and leads will further enhance the potential of CI - 202 and will allow Rialto to progress a full suite of exploration, appraisal and development opportunities through the multi-well drilling program scheduled for 2012 and beyond.

Key activities to be undertaken in CI-202 over the next 6 months are set out in a table in the full announcement.

It is anticipated that the CI-202 Field Development Plan (FDP) will be ready for submission to authorities in Cote d'Ivoire in the early part of 3rd quarter 2011. The FDP will include a full resource management plan, encompassing near term Phase 1 development drilling and the pursuit of identified exploration upside. The key components of the FDP will be:

Finalised drilling plan including Phase 1 and Phase 2 candidates; Phase 1 Development and Engineering concepts for the Gazelle area; Gas monetisation strategy; Strategy for implementation of an upside exploration program; Seismic acquisition strategy; Synergy with other developments in the area; and Economic Evaluation.

Securing of a Rig Contract and Preparation for Drilling

An environmental impact assessment has been completed and in the coming weeks Rialto is looking to finalise contracting for site survey operations over the Gazelle area to take place in 3rd quarter 2011 as part of preparations for drilling.

Further, the Company is currently evaluating drilling rig tenders to cover both the 50m water depths in the Gazelle area and the 90m water depth Hippo area. Prior to the sanctions being imposed necessary approvals from partners and Government in relation to the contracting of a drilling rig had been obtained. Authorisation to refresh these approvals is currently being sought and the Company expects to finalise this process in the coming weeks. Upon execution of the rig contract, a 2-3 well program in the early part of 1st quarter 2012 is scheduled along with a follow-on drilling program set to commence during 3rd quarter 2012. It is anticipated that the 2012 program will test a full range of drilling options from exploration through to development.

Centralisation of the Company's Operations in London and AIM Listing The Company plans to centralise operations in its London office due to core activities taking place in West Africa. This will centralise and enhance operations through reduced travel time and location in similar time zones to the Company's partners and contractors. It is anticipated that the Company's remaining core management team, not already based in London, will be relocated and operating out of that office prior to year end 2011.

An AIM listing is scheduled for 4th quarter 2011, which should enhance the Company's current strong European and UK shareholder base and increase its access to an institutional investor base, familiar with the scale and potential of the West African Transform Margin.

In addition to the abovementioned benefits of having a London-based operation, it is the Company's intention to vigorously pursue new ventures and business development activities to add to the Company's asset base in the West African Transform Margin. Having the Company's operational base in London will allow improved access to potential deals in the region as a large amount of operators and interest holders in the West African Transform Margin are based in or have a significant presence in the UK.

Tags: Rialto Energy